All You Need To Know About New Cheque Books

Bangalore: Have you seen the new Cheque Truncation System (CTS) compliant cheque book? It has many special features introduced by RBI to make the cheque payments a more secure and universalized mode of payment. Remember, your old cheque books from your bank account in India will become void after March 31, 2013, as the RBI has instructed all banks to implement the CTS across the nation. This calls for your immediate action to order for a new CTS-2010 Standard cheque books, states Adhil Shetty, CEO, BankBazaar.com.

What is CTS?

CTS standard cheques are aimed at enhancing customer safety and facilitating easier processing. Under the CTS system, the physical movement of cheques between banks will be eliminated.

Normally, when you issue a cheque to someone, he presents the cheque in his bank to get the credit. And then, the cheque physically moves from his bank to your bank which involves a lot of time and risk.

RBI recognised the disadvantages of this old system and has introduced a new format for cheques, referred as CTS-2010, where instead of the physical movement of the cheque, an electronic image of the cheque is transmitted to the drawee branch (a bank that must pay for a draft or a bill).

The presenting bank (which is the bank of the person to whom you had issued the cheque to) retains the physical cheque.

In addition to the electronic image, certain relevant information is also transmitted, such as date of presentation, presenting bank details, data on the MICR band. Features

A CTS compliant cheque leaf is different from a normal cheque leaf you currently use, and has certain distinct features.

1. The IFSC and MICR codes are a must on every cheque leaflet.

2. All cheques should have a standardised watermark, with the words "CTS-INDIA" which is visible when held against any light source. This would make it difficult for any fraudster to photocopy or print an instrument or bill.

3. Bank details and its logo are printed on the face of the cheque using the ultra-violet (UV) ink The logo can be seen in UV enabled scanners / lamps.

4. Background of cheques shall be kept blank and as clutter free as possible for improving quality and visibility of images.

5. "Payable at par at all branches of the bank in India" text is printed be at the bottom of all the cheques.

6. No alteration / corrections should be made on the cheques (other than for date validation purposes, if required). For any change in the payee's name, amount in figures or amount in words, etc., fresh cheque leaflet should be used by customers.

7. The words ‘please sign above this line' printed at the right bottom corner of the cheque, are mentioned indicating the space where you will need to sign the cheque. The customers are required to use a darker ink for their signatures on the cheque so that the signatures are scan-able.

8. Cheque printer details along with the words ‘CTS-2010’ is mentioned on the extreme left hand side of the cheque leaf near perforation.

9. The new symbol of the Indian rupee is inscribed near the numerical 'amount' field. The right hand corner of the cheque leaf has boxes provided for writing the date which is in the DD/MM/YYYY format.

10. Pantograph with hidden/ embedded word 'VOID' is included in the cheques seen below the area where the account number is printed. The word is clearly visible in photocopies of a cheque.

The above checklist would be more than sufficient for a customer to identify whether the cheque book he currently holds is CTS compliant or not.

Now, you must apply in your bank for a new regulated cheque book available free of cost and then watch out for any communication from your bank regarding its issuance. Once your new cheque book is issued, you can either choose to destroy the old cheques book or surrender it to your bank.

“It also becomes imperative that if one has availed a home loan and/ or auto loan and issued post-dated cheques, then they will be required to replace such post-dated cheques with the CTS-2010 compliant ones now before March 31, 2013," explains Virat Diwanji, Executive Vice President and Head Branch Banking, Kotak Mahindra Bank, as quoted by TOI.

There are quite a few advantages of using a CTS compliant cheque, as the scope of frauds is is low due to the various security checks in place. The CTS also helps in speedy clearance of cheques resulting in faster credit to your account. This is predictably because there is no physical movement of cheques and hence time is saved.

The above is from the mails I receive from Silicon India.